The rates announced by US President Donald Trump are challenging one of the largest export hits in the United States in the last decade: Propane trade with China. The flood of import taxes between the two countries made the American propane prohibitively expensive for the plants that emerged in China to turn it into a Key ingredient for plastic.
Propane prices in the United States fell about 15% and specialized tanker ships that carry the fuel through the oceans have been a strong drop since Trump launched a flood of tariffs earlier this month. Its main target became China, which imposed 145%rates. China responded with 125% rates on imports from the United States, including propane.
Almost zero for a decade, Propane has become one of the main products sold by the United States to Chinatogether with soy and electronics. Last year, China bought almost 18% of all propane exported by Americans, behind Japan only.
Part of this value was for heating and kitchen. But the largest portion was intended for propane dehydration plants, which produce propylene for use in products such as carpets, car bumpers, buckets, water bottles, glasses, food packaging, supermarket bags, mattresses and socks.
China’s reciprocal import tax makes the United States propane deeply anti -economic for its propylene plantsstate analysts and commercial consultants. This without considering the effect that American tariffs can have on the demand for plastic products that China manufactures with American propane and sends back.
The last time China was related to Trump on commercial issues in 2018, the country stopped importing US propane and resorted to other suppliers. However, your stock of product manufacturing plants has increased since then. There is no other supplier capable of supplying the slice of 60% of Chinese consumption that American imports represent, said Julian Renton of the East Daley Analytics energy data company.
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“China cannot replace US propane and the US cannot replace Chinese demand for propane,” says Renton. “These two markets are interconnected and will not be able to detach themselves.”
The US Department of Energy said last week that it expects from around 400,000 barrels a day that China imports from US suppliers find new buyers. But this will not be sufficient to prevent propane to accumulate at the Export Trade Center in Mont Belvieu, Texas, and to prevent prices from falling.
